IFE operator Gogo to split?

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In-Flight Entertainment (IFE) business Gogo says it is considering splitting itself into two entities, one focusing on Business Aviation and the other on Commercial Aviation.  No firm decision had yet been made.

It announced results which saw profit in the Business sub-division had grown 24 per cent in Q1, but its Commercial division saw profits decline 85 per cent q-o-q.

Chicago-based Gogo supplies connectivity for airlines, operationally for crew and entertainment and broadband for passengers.

In a presentation June 13th Gogo repeated its revenue guidance for this year ($865m-935m) although lowered its EBITDA forecasts (to $35 million – $45 million). However, Gogo said it was targeting free cash-flow break-even for 2020, and while reducing costs it then expected “significant” annual growth thereafter with the aim of reaching $200 million EBITDA by 2022.

Gogo, in 2017, lost $172 million and reportedly has a debt burden of about $1 billion.

CEO Oakleigh Thorne, in a Q&A with analysts, spoke of the prospects of consolidation within the airline/IFE supply sector. He told analysts that competitors are thinking about consolidation, and that Gogo had received a number of “strategic enquiries”.

Gogo’s rivals include systems from Panasonic Aviation, Global Eagle Entertainment and Thales.


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